Samsung Electronics, the world’s largest memory chipmaker, has projected a three-fold jump in fourth-quarter operating profit from a year earlier to a record high. This surge in profit is attributed to tight supply and a surge in artificial intelligence-driven demand, which has stoked prices for conventional memory chips.
The results from Samsung highlight how chip prices have skyrocketed as chipmakers race to keep up with the demand for memory chips used in servers, personal computers, and mobile devices to meet AI needs. The company estimated an operating profit of 20 trillion won ($13.82 billion) for the October-December period, surpassing expectations and setting a new quarterly record.
The top makers of conventional chips, including South Korea’s SK Hynix and Micron Technology, are struggling to meet demand and are looking to build more fabrication plants to keep up. Jensen Huang, CEO of Nvidia, the dominant maker of AI processors, emphasized the need for more fabs to support the growing demand for AI technology.
The global DRAM market is expected to more than double to $311 billion in 2026 from last year, according to Macquarie Equity Research. This growth is driven by the increasing use of DRAM chips in servers, computers, and smartphones to store data and run programs efficiently.
Contract prices for DRAM chips rose 313% in the fourth quarter from a year earlier, with expectations for further price increases in the current quarter. Samsung, known for its smartphones and TVs, anticipates a 23% increase in revenue to a record 93 trillion won from a year earlier, with its semiconductor business contributing significantly to its operating profit.
Despite the positive outlook for Samsung’s earnings, rising memory component prices could potentially impact demand and margins for data centers, PCs, and smartphones. Analysts remain optimistic about Samsung’s future, expecting memory undersupply to persist as global data center investment expands.
Samsung’s co-CEO TM Roh acknowledged the impact of rising memory prices, hinting at possible price adjustments for their products. The company’s high-bandwidth memory (HBM) business is expected to experience significant growth in 2026, supported by stronger demand for custom chips like tensor processing units (TPUs).
Samsung plans to release detailed results, including a breakdown of earnings for each business division, on January 29. With the semiconductor business leading the way, Samsung is poised for continued success in the ever-evolving technology landscape.
